Observers often describe political parties as critical stabilizing institutions
in democratic systems of government. Because of the central role played
by German political parties, many observers refer to Germany as a "party
state." The government of this type of state rests on the principle that
competition among parties provides for both popular representation and
political accountability for government action.

On the role of parties, Article 21 of the Basic Law stipulates that "the
political parties shall participate in the forming of the political will
of the people. They may be freely established. Their internal organization
must conform to democratic principles. They must publicly account for
the sources of their funds." The 1967 Law on Parties further solidified
the role of parties in the political process and addressed party organization,
membership rights, and specific procedures, such as the nomination of
candidates for office.

The educational function noted in Article 21 ("forming of the political
will") suggests that parties should help define public opinion rather
than simply carry out the wishes of the electorate. Major parties are
closely affiliated with large foundations, which are technically independent
of individual party organizations. These foundations receive over 90 percent
of their funding from public sources to carry out their educational role.
They offer public education programs for youth and adults, research social
and political issues, and facilitate international exchanges.

Party funding comes from membership dues, corporate and interest group
gifts, and, since 1959, public funds. Figures on party financing from
1992 show that dues accounted for over 50 percent of SPD revenues and
42 percent of CDU revenues. Federal resources accounted for 24 percent
of SPD revenues and 30 percent of CDU revenues; donations accounted for
8 percent and 17 percent, respectively. The parties must report all income,
expenditures, and assets. The government substantially finances election
campaigns. Any party that gains at least 0.5 percent of the national vote
is eligible to receive a set sum. This sum has increased over time and,
beginning in January 1984, amounted to DM5 from the federal treasury for
every vote cast for a particular party in a Bundestag election. Parties
at the Land level receive similar public subsidies. The political
parties receive free campaign advertising on public television and radio
stations for European, national, and Land elections. Airtime
is allotted to parties proportionally based on past election performance.
Parties may not purchase additional time.

Several events, including a party-financing scandal in the early 1980s
and an electoral campaign in Schleswig-Holstein marked by dirty tricks
in the late 1980s, have contributed to increased public distrust of the
parties. A 1990 poll showed that West Germans, in ranking the level of
confidence they had in a dozen social and political institutions, placed
political parties very low on the list.

Although only 3 to 4 percent of voters were members of a political party,
all the major parties experienced a decrease in party membership in the
early 1990s, possibly a result of the increased distrust of political
parties. SPD membership fell by 3.5 percent in 1992 to 888,000. At the
end of the 1970s, the party had had more than 1 million members. CDU membership
fell by 5 percent in 1992 to 714,000, while that of the FDP fell by about
one-fifth to 110,000.

Article 21 of the Basic Law places certain restrictions on the ideological
orientation of political parties: "Parties which, by reason of their aims
or the behavior of their adherents, seek to impair or abolish the free
democratic basic order or to endanger the existence of the Federal Republic
of Germany, shall be unconstitutional. The Federal Constitutional Court
shall decide on the question of unconstitutionality." This provision allowed
for the banning of the neo-Nazi Socialist Reich Party in 1952 and the
Communist Party of Germany (Kommunistische Partei Deutschlands--KPD) in
1956.

The decision to regulate the organization and activities of political
parties reflects lessons learned from Germany's experience during the
post-World War I Weimar Republic, when a weak multiparty system severely
impaired the functioning of parliamentary democracy and was effectively
manipulated by antidemocratic parties. After World War II, many parties
dotted the West German political landscape, but electoral laws allowed
only parties with at least 5 percent of the vote to have representation
in national and Land parliaments. Over time, the smaller parties
faded from the scene. From 1962 to 1982, the Bundestag contained representatives
from only four parties: the CDU, the CSU, the SPD, and the FDP. The Greens
gained enough of the national vote to win seats in 1983, and unification
brought additional parties into the Bundestag in late 1990. At the federal
level, the CSU coalesces with the CDU, the largest conservative party.
The SPD is the major party of the left. The liberal FDP is, typically,
the critical swing party, which can form a coalition with either the CDU/CSU
or the SPD to create the majority needed to pass legislation in the Bundestag.